Starbucks raises profit forecast, to speed store openings

Thu Nov 1, 2012 6:21pm EDT
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By Lisa Baertlein

(Reuters) - Starbucks Corp (SBUX.O: Quote) raised its profit forecast for the current fiscal year and plans to speed up new store openings, as strength in its latest quarter and new products, gave the company confidence not seen by many of its peers in the U.S. restaurant industry.

Shares of the world's biggest coffee chain jumped 7.4 percent to $49.55 in extended trading.

The results were in contrast to others in the restaurant industry, including McDonald's Corp (MCD.N: Quote), which have largely been a string of disappointments and diminishing expectations as some of the sector's top performers grapple with the still weak economy and increasing competition from resurgent rivals.

Starbucks set its new earnings per share forecast for fiscal 2013 at $2.06 to $2.15, up from $2.04 to $2.14 per share, previously.

It now plans to open 1,300 net new stores globally, up from 1,200.

"Starbucks' solid Q4 performance has ideally positioned us to go into the holiday with strong momentum," Chief Executive Howard Schultz said on a conference call with analysts.

Starbucks net income rose 0.1 percent to $359 million, or 46 cents per share, topping analysts' average forecast by a penny, according to Thomson Reuters I/B/E/S.

Global sales at stores open at least 13 months rose 6 percent, helped by a 5 percent increase in traffic and a 1 percent rise in average spending per visit. That topped the 4.97 percent rise analysts polled by Consensus Metrix had expected.   Continued...

The Starbucks logo is seen outside the new Starbucks cafe in Warsaw March 6, 2011. REUTERS/Kacper Pempel